by Henry Olsen
Unlike his first wife, Jane Wyman, Reagan never hit it big enough to experience the downsides of this system. His career, on the rise in late 1941 from well-reviewed roles in Knute Rockne and Kings Row, was seriously damaged by his wartime military service.43 He had been surpassed in the acting pecking order by the time he was discharged in late 1945, and his career went into a slow and steady decline as both the quality and the quantity of his parts shrunk.
The government’s antitrust victory came at a poor time for the studios. Television became a significant competitor by the early 1950s; combined with the reduced profits and increased risks associated with dismantling the proscribed practices, studios began cutting the number of films they made and reducing the number of contracts they gave. Reagan’s was one of the contracts reduced in scale and remuneration.
By 1953 Reagan was financially on the ropes. He had been divorced by his first wife in part because of his heavy political involvement, and his second wife was an actress even lower on the totem pole than he.44 With a newborn in the house and heavy debt from land purchases he had made during more fruitful economic times, Reagan needed to make a living. The answer to his financial problems, becoming the host of a television show sponsored by General Electric, also gave him the exposure to life outside Hollywood that changed his politics.
Part of Reagan’s deal was that he would also travel the country in the company of a GE executive, Earl Dunckel, and give speeches to GE plants. Starting in August 1954, Reagan was on the road almost a third of the year giving talks.45 Initially they were about only his life in Hollywood, but by 1956 Reagan started to include references to the industry’s travails with the antitrust suit and with local efforts to censor movie content as “a kind of warning to others.”46 Let’s allow Reagan to take it from here:
Well, after I began to include these remarks in the speeches, an interesting thing happened: No matter where I was, I’d find people from the audience waiting to talk to me after a speech and they’d all say, “Hey, if you think things are bad in your business, let me tell what is happening in my business. . . .”
I’d listen and they’d cite examples of government interference and snafus and complain how bureaucrats, through overregulation, were telling them how to run their businesses. . . .
From hundreds of people in every part of the country, I heard complaints about how the ever-expanding federal government was encroaching on liberties we’d always taken for granted. I heard it so often that I became convinced that some of our fundamental freedoms were in jeopardy because of the emergence of a permanent government never envisioned by the framers of the Constitution: a federal bureaucracy that was becoming so powerful it was able to set policy and thwart the desires not only of ordinary citizens, but their elected representatives in Congress.47
Reagan’s life had taken a dramatic and fateful turn.
His GE experience influenced his political outlook in another crucial way: it disabused him of the notion that large businesses were usually in the wrong. Uniquely for companies in that time, GE’s chairman, Ralph Cordiner, ran a decentralized business that gave individual plant directors significant power and authority.48 Cordiner, with the assistance of his vice president for labor, Lemuel Boulware, also tried to treat workers well enough that they wouldn’t want to follow confrontational unions.49 That doesn’t mean GE’s plants weren’t unionized or were free from conflict, but it did mean that workers were treated as human beings rather than parts no less disposable than the machines they operated. Reagan saw both of these approaches in practice and began to think that business could be humane and that labor could work in a genuine partnership with management.
Something else was going on that likely was noticed by Reagan: Democrats started to campaign on a softer line toward the Soviet Union. The 1956 Democratic presidential nominee, Adlai Stevenson, proposed eliminating the peacetime draft and negotiating with the Soviet Union to end nuclear weapons testing and lower defense spending. Other liberals denied the existence or the extent of Communist spying within the United States, going so far as to question whether the events Reagan had experienced were examples of Communist subversion as he believed. Reagan never questioned these people’s motives or sincerity, but he did increasingly come to think that mainstream liberalism was hopelessly naive when it came to Communist tactics and intentions.
Most observers agree that by 1956, Reagan had stopped privately defending New Deal liberalism.50 For a number of reasons Reagan remained a registered Democrat for another six years, but in his mind he was turning away from the Democratic Party. His public speeches increasingly focused on politics, the threat to freedom, and the need for ordinary Americans to retake their government and recommit it to the promises of the founding. What most observers consider his conservative conversion was nearly complete.
It is here when the public trail begins to pick up in earnest. No copies of Reagan’s speeches from the mid-1950s seem to have survived in print or audio form, but a number of his talks from after 1956 do. Biographers and analysts uniformly cite Reagan’s invocations in this period against the power of government and the bureaucracy, his increasing criticism of the progressive income tax, and his cries that freedom was at risk at home and abroad if people did not mobilize to retake their government. These broad themes were spoken primarily by the political right at this time. But one should never take what someone else says at face value when access to the original source is available. Curious as to what I would find, I traveled to the Reagan Presidential Library to listen and to watch the newly minted “right-winger” when he was only beginning to emerge into the public eye.
The Reagan Library is a beautiful, California-mission-style building set on a hilltop in the suburban Simi Valley. The setting is serene and the research library is even quieter. As I entered and was set up for my encounter with Reagan’s formative period, the archivist in charge of the audiovisual collection warned me to be prepared for a different Reagan than I was used to. He was specifically referring to his rapid, energetic speaking style, so much quicker and passionate than the warmer, grandfatherly tones many associate with his presidential utterances. But he may as well have been referring to his ideas.
Reagan’s post-1956 speeches are a fascinating blend of conservative warnings about the dangers of increased governmental power and communism and explicit acceptance of most of the procedural and programmatic legacy of the New Deal. In talk after talk, he both inveighed against a government that regulated and taxed too much and endorsed the post–New Deal expansion of federal power that helped the poor and the common person live more comfortable lives. The result was a compelling, spellbinding, and wholly original approach to the problems of 1950s and early 1960s America.
Reagan made this work by making the bureaucracy, not the New Deal, the focus of his assault. He paraded example after example of bureaucrats issuing or enforcing regulations that appeared to defy common sense but forced honest Americans to do something harmful or objectionable.51 He chronicled the government’s attempts to compete with private enterprises and detailed the high salaries many government officials made. The result was a government that was taking 31 percent of the national income in taxes but was primarily serving its own interests, not those of people on whose behalf it claimed to govern.52
The progressive income tax was a particular focal point for criticism. Contending that it was the invention of Karl Marx, Reagan argued that high marginal tax rates constituted “avowedly confiscatory discrimination against incentive and initiative.”53 He assailed the 91 percent top rate of tax, but spent more time detailing the high marginal tax rates levied on those with middle or slightly higher than middle incomes. At a time when the average family made slightly more than $6,000 a year, he attacked the fact that a family making $8,000 a year was in the 34 percent bracket and one earning $12,000 faced a 43 percent marginal rate.54 Even then, the average individual, not the most successful one, was the person Reagan primarily addressed.
; The result was a threat to American freedom itself. Time and again Reagan would argue that history shows that “any time the tax burden of a country is 25 percent or more” the free enterprise system is in danger.55 Even Congress seemed powerless to stop this bureaucratic power grab. Reagan told his audiences of his visits to Congress, in which congressmen would freely tell him they had little power to control the bureaucracy or question its budget priorities. Unless the American people woke up and mobilized to retake power soon, the last, best hope of man on earth might pass from history.
It is easy to see from these passages how liberals and conservatives alike could view Reagan as a threat or a hero. The liberal who believed that increasing federal spending and power were essential would see an implacable foe, while the conservative who opposed the same proposals would see an invaluable ally. Liberals in particular could hear echoes of FDR’s nemesis, Herbert Hoover, in Reagan’s warning. Hoover’s 1932 speeches in opposition to Roosevelt struck many of the same themes about how larger government power threatened the loss of American freedom. Hoover even advanced the argument that free enterprise would be threatened if overall taxation rose above a particular level (Hoover placed the danger point at 16 percent of national income).56 Both sides in the dispute that would come to shape American politics for the next half century could reasonably come to their own version of the same conclusion: if Reagan opposed the expansion of federal power and high levels of taxation with such passion and vigor, he must be on or opposed to my side.
Those views ignore, however, how intricate Reagan’s argument actually was. By making unelected bureaucrats the enemy, Reagan left open the possibility that elected officials could exercise power responsibly. By making governmental control and planning the primary evils to be feared, he left open the possibility that government—even the federal government—could do some things well that would help rather than hinder traditional American values.
Reagan’s failure to attack most specific government programs begged this question even more. By making popular control of government rather than strict adherence to the Constitution’s doctrine of enumerated powers the solution, he left open the possibility that the government that would result would continue to do many of the things promised by Roosevelt, Truman, and Eisenhower. In short, the attention-getting critiques that most observers then and now paid attention to were only half of the story. The real issue was how far Reagan would extend those critiques.
Reagan’s speeches always included a long section after the critiques that addressed these questions. They would always include sentences that made clear that his argument did not extend to programs that sought to alleviate poverty, give people economic security, or provide educational opportunity. In short, he was not attacking the principal achievements of the New Deal; he was attacking only the sort of excesses that characterized the state-centric interpretation of the New Deal made by followers of Henry Wallace.
His 1958 speech to the California Fertilizer Association makes this crystal clear.57 In the speech, after launching his broadsides against high taxation and bureaucratic control, Reagan took on the Veterans Administration and the proposal to establish Medicare. In each case he distinguished what was on offer from what would be legitimate programs to help people in need. His criticism of the VA was against giving $100-a-month pensions to World War I vets “whether they need it or not.” His critique of Medicare was that it would be an unnecessary “free lunch” that gave everyone the same plan despite the fact that increased coverage of private health insurance and pensions were giving millions of seniors access to medical care. “How many [Medicare proponents] are really concerned with taking care of a need,” he said, “or are simply doing it because they believe in government doing all these things?”
Reagan then turned to a staple of his talk, the blanket assertion of a principle of what would constitute legitimate government action. When I heard this iteration of it, I was so taken by its scope and its precision that I played back the tape repeatedly for fifteen minutes so I could transcribe every word. Here is what Reagan said:
Certainly no thinking American would dispute the idea that there should be an economic floor below which no American should be allowed to live. In the last few decades we have indulged in a great program of social progress with many welfare programs. I’m sure that most of us in spite of the cost wouldn’t buy back many of these projects at any price. They represented forward thinking on our part.
The New Dealer or the Modern Republican would find these statements uncontroversial. Indeed, FDR had said something similar in fireside chat 5: “In a land of vast resources no one should be permitted to starve.” But there were, in fact, many thinking Americans who did dispute that idea and were willing to buy back these projects at any price. They called themselves conservatives.
Reagan’s lines were not simply throwaways that he ignored when evaluating specific policies. Consider public universities. The large, multicampus systems we know today were in fact the brainchild of state-level New Dealers and Modern Republicans. The 1950s were when the modern, giant systems were beginning to be built. They were then often, as in Reagan’s California, tuition free, funded wholly by the taxpayer. Conservatives who were primarily interested in limiting taxation and public power might have been expected to resist or oppose the significant expansion of public higher education then under way. Not Reagan.
Reagan specifically endorsed this expansion in his 1957 commencement address to his alma mater, Eureka College. “We have a vast system of public education in this country, a network of great state universities and colleges and none of us would have it otherwise,” he told the graduates.58 Reagan’s fear was not that these institutions would drive the taxpayer into penury; it was that some people would “urge expansion of this system until all education is by way of tax-supported institutions.” “No one advocates the elimination of our tax-supported universities,” he said, but eliminating private education would threaten academic freedom “for when politics control the purse strings, they also control the policy.”
This passage demonstrates what is clear throughout his speeches, that Reagan aimed to preserve freedom and not simply to oppose government. High taxation was a problem, but government control that threatened to replace self-government with imposed conformity was the biggest problem. He told the graduates what he often said to his audience:
There are many well-meaning people today who work at placing an economic floor beneath all of us so that no one shall exist below a certain level or standard of living, and certainly we don’t quarrel with this. But look more closely and you may find that all too often these well-meaning people are building a ceiling above which no one shall be permitted to climb and between the two are pressing us into conformity, into a mold of standardized mediocrity.
Conservatives of that era often believed that the very programs that “placed a floor” under people were the ones that built the ceiling of taxation that pressed people into conformity. Reagan disagreed, arguing that taxes could be significantly reduced by cutting useless programs and budgetary fat.59
Reagan separated from conservatives in another important policy area, the role and power of organized labor. America’s politics and economy were much different then. Large-scale manufacturing was the economy’s lynchpin. Outside of the conservative South, the US workforce was heavily unionized. These private-sector unions (public employees had not yet won the right to join unions) formed the Democratic Party’s political backbone. They provided the financing for its campaigns and the organizational muscle behind its efforts. Union members also provided the bulk of Democratic Party voters in non-southern states, much as management and nonunionized employees formed the bulk of Republican voters.
These facts made labor policy a key matter of partisan political combat. Democrats had used their power in the 1930s to pass the Wagner Act, a bill that forced management to collectively bargain with unions that had been supported by a majority of the firm’s employe
es. The act also required all employees of a unionized firm to join the union whether they wanted to or not. While battles between unions and management covered a host of other issues, this requirement was a focal point of intense debate between the two sides. Since union members were required to pay dues to belong, anything that affected how many people paid those dues was hotly disputed.
Republicans moved quickly to undo some of the prounion elements of the Wagner Act when they regained control of Congress after the 1946 elections. With the support of conservative southern Democrats, they passed the Taft-Hartley Act over President Truman’s veto. Among other things, Taft-Hartley permitted states to opt out of the requirement that all employees join a union in an organized company. Subsequently, passing these state-level laws—which conservatives called “right-to-work” bills—became a top priority.
Reagan had been a staunch union man in his New Deal days, heading SAG for six years between 1947 and 1952. Despite his movement away from loyalty to the Democratic Party, Reagan never abandoned his support for labor’s right to organize. This extended to right-to-work laws: Reagan opposed these as governor even though they “include . . . a certain amount of compulsion as regards to union membership.”60
This belief became highly relevant in 1958 as conservatives and employers successfully placed initiatives that authorized right-to-work laws on the ballots in four states, including California. The battle was particularly intense there, as Senator William Knowland, a favorite of Buckley’s National Review, made Proposition 18 a primary issue in his effort to become governor. Knowland wanted to run for president and indeed had been encouraged by Buckley to do so in 1955 when it looked as though Eisenhower would not run for reelection because of his health.61